Site Navigation

Site Mobile Navigation

G.O.P. in House Offers Medicare Drug Plan

House Republicans began rallying support today for their plan to offer insurance coverage of prescription drug costs to all 39 million Medicare beneficiaries, even as the White House called the proposal ''a major disappointment.''

AARP, a leading voice for older Americans, cautiously welcomed the proposal but noted that the Republicans had offered only an outline, without providing details of how the plan would work.

Speaker J. Dennis Hastert and a dozen other Republican representatives unveiled their proposal as winds blustered around them in an outdoor ceremony on the Capitol steps.

''Those Medicare beneficiaries who choose this voluntary plan will never have to pay retail prices for their prescription drugs again,'' said Mr. Hastert, who supervised development of the proposal by a group of 15 lawmakers.

Republicans insisted that the coverage would be ''affordable, voluntary and available to all,'' as signs at their rally said.

Under the Republican proposal, insurers would pool the purchasing power of large groups of Medicare beneficiaries to negotiate discounts from drug manufacturers, as labor unions and employers now do for workers and some retirees.

House Republicans said they intended to impose a limit on the amount of money that any Medicare beneficiary would have to pay for prescription drugs in a year -- ''a monetary ceiling beyond which Medicare would pay 100 percent of beneficiaries' drug costs,'' according to a summary of the proposal. Lawmakers refused to say what the ceiling would be; Congressional aides said the annual limit could be in the range of $2,000 to $3,000 a person.

Horace B. Deets, executive director of AARP, formerly known as the American Association of Retired Persons, said the Republican proposal ''has merit and should be explored carefully.'' It is, Mr. Deets said, a major improvement over earlier Republican proposals that would have provided drug coverage only to older Americans with low incomes.

Under the Republican plan, the government would pay the cost of drug insurance for people with low incomes, perhaps up to 35 percent or 50 percent above the poverty level. (A couple is classified as poor if it has income less than $11,250 this year.)

In addition, under the Republican plan, the government would pay most drug costs for people with very high pharmaceutical expenses. This would relieve insurers of perhaps 25 percent of the total cost, allowing them to charge lower premiums to all beneficiaries, Republicans said.

An error has occurred. Please try again later.

You are already subscribed to this email.

Max Richtman, executive vice president of the National Committee to Preserve Social Security and Medicare, which represents five million beneficiaries of those programs, said: ''We are disappointed. The drug benefits in the House Republican plan would not be part of the standard Medicare benefits package. The Republicans would provide a significant subsidy for the poor, and there's nothing wrong with that. But the Republicans offer no assistance for middle-income seniors, no assurance they would be able to obtain or afford private insurance for drug costs.''

Democrats plan to highlight their commitment to Medicare drug benefits in political events over the next two weeks, when the House is in recess, and they hope to use the issue to regain control of the House in this year's elections. With today's proposal, House Republicans will be able to offer their own plan.

Independent observers say a compromise is possible. President Clinton and Congressional Republicans generally agree on the amount to be spent, up to $40 billion over five years, though House Republicans said they wanted to use a small amount of that money to make basic medical care more accessible to elderly people in rural areas.

The initial reaction from the White House and House Democratic leaders was negative.

The president's health policy coordinator, Chris Jennings, said: ''The House Republican proposal is a major disappointment. The rhetoric is good, but it is not matched by the reality of the policy. There's no defined benefit. We don't know what benefits we're buying here. And we don't know what the premium would be.''

The House Democratic leader, Richard A. Gephardt of Missouri, said Republicans had ''waited until the middle of an election year to begin talking about prescription drug coverage'' for the elderly.

Medicare generally does not cover prescription drug costs for people outside the hospital, and one-third of the 39 million Medicare beneficiaries have no insurance to cover drug costs.

The Congressional Budget Office says that spending on outpatient prescription drugs averages $1,539 for each Medicare beneficiary this year, and it predicts that spending will rise to $2,075 a person in three years.

Representative Bill Thomas of California, one of the Republicans' top health care experts, said: ''Our proposal would provide the same financial assistance to low-income people as the president's. But the benefits under our plan are richer.''

The House Republican proposal accepts the general approach favored by many drug companies, and the main trade group for the drug industry, the Pharmaceutical Research and Manufacturers of America, has been frantically lobbying Congress. But Jackie Cottrell, a spokeswoman for the trade association, said it had no comment on the House Republican proposal.

Gregory E. Reaves, a spokesman for Merck & Company, said, ''Although we have not seen details of the plan, the concepts outlined today appear to provide all Medicare beneficiaries with access to affordable prescription drug coverage, a goal we fully support.''